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New Technologies

The development of new technologies, such as online banking, mobile phone banking, virtual exchanges, virtual banks, internet based trading platforms for a variety of precious metals, crypto and fiat currencies, all enable money to move anywhere in the world quickly and easily. This of course means that it is harder to act in time when illicit funds are being moved from one country to another.

The creation of the single market means that money can now travel in nanoseconds, meaning that multiple jurisdiction leaps are made effortlessly on a daily basis, are much harder to track and if Law Enforcement can track them, gaining the overseas co operation to seize/freeze or obtain evidence for conviction, is both more costly and more time consuming.

Underground Economies

The black market, underground economy, or shadow economy is a clandestine market that has some aspect of illegality or is characterized by some form of non-compliant behaviour with an institutional set of rules. This type of shadow economy is often controlled by organised crime groups which themselves may have transnational and cross border connections.

Common motives for operating in black markets are to trade contraband, counterfeit or illegal goods, avoid taxes and regulations, or skirt price controls or rationing. Cash usage is the preferred medium of exchange in illegal transactions since cash usage does not leave a footprint. However, the only way to legitimise the 'black money' arising through black markets is by some form of money laundering, usually beginning with placement.

Crypto Currencies

Whilst being seen as an enormous and welcomed development by many, crypto currencies can be used by criminals in much the same way as normal currency – it can be stolen, used as a mechanism for fraud or other illegal acts, it can be laundered or used as a medium for laundering.

One of the unusual features of crypto currency, compared to cash, is that its ownership can be transferred without physical movement. Due to the “blockchain” technology, the nature of ownership is merely holding the “key” sometimes referred to as the “code” or “algorithm”. Crypto currency has many of the hallmarks of bearer bonds or other negotiable financial instruments and therefore many of the risks associated.

Offshore Finance Centres

Jurisdictions which offer high levels of secrecy, and a variety of financial mechanisms and institutions providing anonymity for beneficial owners, are highly attractive to criminals for a wide variety of reasons including the potential cover and protection they offer for money laundering and various exercises in financial fraud.

However, offshore financial centres and bank secrecy jurisdictions differ in many ways, for instance, what services they provide, the level of anonymity and secrecy they may offer through locally legal structures, and their willingness to cooperate with international law enforcement investigations.

Financial De-Regulation

As traditional trade barriers, border controls and exchange controls have been dismantled, so the “checkpoints” at which the movement of illicit goods and funds have reduced.

This, combined with the emergence of five or six dominant world currencies (dollar, renminbi/yuan, rupee, rouble, euro, sterling), increased the difficulty of tracking funds.